The WorldatWork Total Rewards Model demonstrates the dynamic relationship between employers and employees. Originally introduced in 2000, it has evolved to depict the strategic elements of the employer-employee exchange as well as to reflect how external influences and an increasingly global business environment affect attraction, motivation, retention and engagement.
To learn more about an area of the model, click on it.
Successful organizations understand that total rewards must be designed and administered in the context of not only an organization's internal environment (for which organizations have direct control), but also influences external to the organization (for which there is little or no control).
Business Strategy, Organizational Culture and Human Resources Strategy
Human resources and employee rewards strategies should be based on the organization's business strategy. At the same time, every business has a unique organizational culture that is affected by the external influences in the world, as well as by senior leadership, geography, employee demographics and even the business strategy itself. Business strategy and organizational culture drive the design and execution of the human resources strategy that, in turn, shapes the development and administration of total rewards strategy.
The six elements of total rewards include programs, practices, elements and dimensions that collectively define an organization's strategy to attract, motivate, retain and engage employees. These elements represent the tool kit from which an organization chooses to offer and align a value proposition that results in satisfied, engaged and productive employees who, in turn, create desired business performance and results.
The desired outcome of an organization's total rewards strategy is business performance and results through the work of engaged employees who contribute their time, talent and efforts. An effective total rewards strategy produces a workforce that has the right people in the right jobs who are motivated and engaged to do the right things – and feel loyal to the organization and its success.
The six elements of total rewards that collectively define an organization's strategy to attract, motivate, retain and engage employees are:
Compensation: Pay provided by an employer to its employees for services rendered (i.e., time, effort, skill). This includes both fixed and variable pay tied to performance levels.
Benefits: Programs an employer uses to supplement the cash compensation employees receive. These health, income protection, savings and retirement programs provide security for employees and their families.
Work-Life Effectiveness: A specific set of organizational practices, policies and programs, plus a philosophy that actively supports efforts to help employees achieve success at both work and home.
Recognition: Either formal or informal programs that acknowledge or give special attention to employee actions, efforts, behavior or performance and support business strategy by reinforcing behaviors (e.g., extraordinary accomplishments) that contribute to organizational success.
Performance management: The alignment of organizational, team and individual efforts toward the achievement of business goals and organizational success. Performance management includes establishing expectations, skill demonstration, assessment, feedback and continuous improvement.
Talent development: Provides the opportunity and tools for employees to advance their skills and competencies in both their short- and long-term careers.